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{{italic title}}{{Short description|Legal concept meaning powers are exceeded}}
{{EngvarB|date=January 2019}}
[[File:Wilmington_Delaware_skyline.jpg|thumb|right|375px|[[Wilmington, Delaware]] is the incorporation capital of the United States.<ref>{{cite web|url=https://www.incplan.net/blog/business-startup/top-5-us-states-company-formations/ |title=Top 5 US States For Company Formations |publisher=Inc Plan (USA) |author=Evelina Munteanu |date=25 November 2014 |access-date=7 November 2017}}</ref> Delaware has largely abolished ''ultra vires'' in relation to corporations under the [[Delaware General Corporation Law]].<ref>{{cite web|url=https://www.delawarelitigation.com/2012/09/articles/chancery-court-updates/septa/ |title=Abolishment of Ultra Vires Doctrine with Exceptions |author=Francis Pileggi |date=4 September 2012 |access-date=7 November 2017}}</ref>]]

'''{{lang|la|Ultra vires}}''' ('beyond the powers') is a [[List of Latin phrases|Latin phrase]] used in law to describe an act which requires legal authority but is done without it. Its opposite, an act done under proper authority, is '''{{lang|la|intra vires}}''' ('within the powers'). Acts that are {{lang|la|intra vires}} may equivalently be termed "valid", and those that are {{lang|la|ultra vires}} termed "invalid".

Legal issues relating to {{lang|la|ultra vires}} can arise in a variety of contexts:
* [[Company|Companies]] and other [[legal person]]s sometimes have limited [[capacity (law)|legal capacity to act]], and attempts to engage in activities beyond their legal capacities may be {{lang|la|ultra vires}}.<ref name=Ashbury /> Most countries have restricted the doctrine of {{lang|la|ultra vires}} in relation to companies by statute.
* Similarly, statutory and governmental bodies may have limits upon the acts and activities which they legally engage in.<ref>''[[Hazell v Hammersmith and Fulham LBC]]'' [1992] 2 AC 1</ref>
* [[Primary and secondary legislation|Subordinate legislation]] which is purported passed without the proper legal authority may be invalid as beyond the powers of the authority which issued it.<ref>''[[Woolwich Equitable Building Society v IRC]]'' [1993] AC 70</ref><ref name=Boddington>{{cite bailii |litigants=[[Boddington v British Transport Police]] |year=1998 |court=UKHL |num=13}}</ref>

== Corporate law ==
{{see also|Corporate law}}
{{Corporate law|doctrines}}

In corporate law, {{lang|la|ultra vires}} describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation's [[objects clause]], its [[articles of incorporation]], its [[by-laws]], similar founding documents, or laws authorizing a corporation's formation. Acts attempted by a corporation that are beyond the scope of its charter are [[Void (law)|void]] or [[voidable]].

# An {{lang|la|ultra vires}} transaction cannot be ratified by shareholders, even if they wish it to be ratified.
# The doctrine of [[estoppel]] usually precluded reliance on the defense of {{lang|la|ultra vires}} where the transaction was fully performed by one party.
# ''[[A fortiori]]'', a transaction which was fully performed by both parties could not be attacked.
# If the contract was fully executory, the defense of {{lang|la|ultra vires}} might be raised by either party.
# If the contract was partially performed, and the performance was held to be insufficient to bring the doctrine of estoppel into play, a suit for [[quasi-contract]] for recovery of benefits conferred was available.
# If an [[agent (law)|agent]] of the corporation committed a [[tort]] within the scope of his or her employment, the corporation could not defend on the ground the act was {{lang|la|ultra vires}}.

Several modern developments relating to corporate formation have limited the probability that {{lang|la|ultra vires}} acts will occur. Except in the case of [[non-profit corporation]]s (including [[municipal corporations]]), this legal doctrine is [[Desuetude|obsolescent]]; within recent years, almost all business corporations are chartered to allow them to transact any lawful business. The [[Model Business Corporation Act]] of the United States states that: "The validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act." The doctrine still has some life among non-profit corporations or state-created corporate bodies established for a specific public purpose, such as universities or charities.

===United Kingdom===
{{see also| United Kingdom company law}}
Historically all companies in the United Kingdom were subject to the doctrine of {{lang|la|ultra vires}} and any act which was outside of the objects specified in a company's [[memorandum of association]] would be {{lang|la|ultra vires}} and [[void (law)|void]].<ref name=Ashbury>''[[Ashbury Railway Carriage and Iron Co Ltd v Riche]]'' (1875) LR 7 HL 653</ref> That result was commercially unpalatable, and led to companies being formed with extremely wide and generic objects clauses permitting a company to engage in all manner of commercial activities.<ref>''[[Rolled Steel Products (Holdings) Ltd v British Steel Corp]]'' [1986] Ch 246</ref>

The position was changed by statute by the [[Companies Act 1985]] which largely abolished the doctrine in relation to commercial companies. The position is now regulated by the [[Companies Act 2006]], sections 31 and 39, which similarly greatly reduces the applicability of {{lang|la|ultra vires}} in corporate law, although it can still apply in relation to charities and a shareholder may apply for an [[injunction]], in advance only, to prevent an act which is claimed to be {{lang|la|ultra vires}}.

In many jurisdictions, such as Australia, legislation provides that a corporation has all the powers of a natural person<ref>[http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s124.html Sn 124 Legal capacity and powers of a Company], ''Corporations Act 2001'', Commonwealth Consolidated Acts</ref> plus others; also, the validity of acts which are made {{lang|la|ultra vires}} is preserved.<ref>[http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s125.html Sn 125 Constitution may limit powers and set out objectives], ''Corporations Act 2001'', Commonwealth Consolidated Acts</ref>

===United States===
According to American laws, the concept of {{lang|la|ultra vires}} can still arise in the following kinds of activities in some states:
# Charitable or political contributions
# Guaranty of indebtedness of another
# Loans to officers or directors
# Pensions, bonuses, stock option plans, job severance payments, and other fringe benefits
# The power to acquire shares of other corporations
# The power to enter into a partnership

==Constitutional law==

Under [[constitutional law]], particularly in [[Constitutional law of Canada|Canada]] and the [[United States constitutional law|United States]], constitutions give federal and provincial or state governments various powers. To go outside those powers would be {{lang|la|ultra vires}}; for example, although the court did not use the term in striking down a federal law in ''[[United States v. Lopez]]'' on the grounds that it exceeded the constitutional authority of Congress, the Supreme Court still declared the law to be {{lang|la|ultra vires}}.<ref>''United States v. Lopez'', {{Ussc|514|549|1995|pin=567}}.</ref>

According to Article 15.2 of the [[Constitution of Ireland|Irish constitution]], the [[Oireachtas]] (parliament) is the sole lawmaking body in the [[Republic of Ireland]]. In the case of ''[[CityView Press v AnCo]]'', however, the [[Supreme Court of Ireland]] held that the Oireachtas may delegate certain powers to subordinate bodies through primary legislation, so long as these delegated powers allow the delegatee only to further the principles and policies laid down by the Oireachtas in primary legislation and not craft new principles or policies themselves. Any piece of primary legislation that grants the power to make public policy to a body other than the Oireachtas is unconstitutional; however, as there is a presumption in [[Constitution of Ireland|Irish constitutional law]] that the Oireachtas acts within the confines of the constitution, any legislation passed by the Oireachtas must be interpreted in such a way as to be constitutionally valid where possible.

Thus, in a number of cases where bodies other than the Oireachtas were found to have used powers granted to them by primary legislation to make public policy, the impugned primary legislation was read in such a way that it would not have the effect of allowing a subordinate body to make public policy. In these cases, the primary legislation was held to be constitutional, but the subordinate or secondary legislation, which amounted to creation of public policy, was held to be {{lang|la|ultra vires}} the primary legislation and was struck down.

In [[UK constitutional law]], {{lang|la|ultra vires}} describes patents, ordinances and the like enacted under the [[prerogative powers]] of the Crown that contradict statutes enacted by the [[Queen-in-Parliament|Crown-in-Parliament]]. Almost unheard of in modern times, {{lang|la|ultra vires}} acts by the Crown or its servants were previously a major threat to the [[rule of law]].{{cn|date=June 2021}}

''[[Boddington v British Transport Police]]'' is an example of an appeal heard by House of Lords that contested that a bylaw was beyond the powers conferred to it under section 67 of the [[Transport Act 1962]].<ref name=Boddington />

==Administrative law==
In [[administrative law]], an act may be [[judicial review|judicially reviewable]] for {{lang|la|ultra vires}} in a narrow or broad sense. Narrow {{lang|la|ultra vires}} applies if an administrator did not have the substantive power to make a decision or it was wrought with procedural defects. Broad {{lang|la|ultra vires}} applies if there is an abuse of power (e.g., [[Wednesbury unreasonableness]] or bad faith) or a failure to exercise an administrative discretion (e.g., acting at the behest of another or unlawfully applying a government policy) or application of discretionary powers in irrational and wrong way.<ref>Örücü Esin, The Liability of administration in England and main principles applied in judicial review, in Onar Armagani, Fakulteler Matbaasi, Istanbul 1977, p.660</ref> Either doctrine may entitle a claimant to various prerogative writs, equitable remedies or statutory orders if they are satisfied.

===United Kingdom===
In the seminal case of ''[[Anisminic v Foreign Compensation Commission]]'',<ref>''Anisminic v Foreign Compensation Commission'' [1969] 2 WLR 163</ref> Lord Reid is accredited with formulating the doctrine of {{lang|la|ultra vires}}. However, {{lang|la|ultra vires}}, together with unreasonableness, was mentioned much earlier by Lord Russell in the well-known case, ''[[Kruse v Johnson]]'',<ref>''Kruse v Johnson'' [1898] 2 QB 91</ref> regarding challenging by-laws and other rules. ''Anisminic'' is better known for not depriving courts of their jurisdiction to declare a decision a nullity, even if a statute expressly prevents the decision being subject to judicial review. Further cases such as ''[[Fares Fair#Legal challenge|Bromley LBC v Greater London Council]]''<ref>''Bromley LBC v Greater London Council'' [1983] AC 768 (see Lord Wilberforce's judgment)</ref> and ''[[Council of Civil Service Unions v Minister for the Civil Service]]''<ref>''Council of Civil Service Unions v Minister for the Civil Service'' [1985] AC 374 (see Lord Diplock's judgment)</ref> have sought to refine the doctrine.

In ''[[Hammersmith and Fulham London Borough Council v Hazell]]''<ref>''Hammersmith and Fulham London Borough Council v Hazell'' [1992] 2 AC 1</ref> the [[Judicial functions of the House of Lords|House of Lords]] held that [[interest rate swap]]s entered into by [[local authority|local authorities]] (a popular method of circumventing statutory restrictions on local authorities borrowing money at that time) were all {{lang|la|ultra vires}} and [[void (law)|void]], sparking a [[local authorities swaps litigation|raft of satellite litigation]].

==See also==
*[[Judicial activism]]
*[[Judicial Review in English Law]]
*Mark Elliott ([[St Catharine's College, Cambridge]] proposes the modified {{lang|la|ultra vires}} doctrine for administrative law, placing it firmly in the correct constitutional setting. (''The Ultra Vires Doctrine in a Constitutional Setting: Still the Central Principle of Administrative Law'' [1999] Cambridge Law Journal Vol. 58 129)
*[[Precedent]]

==Notes==
{{reflist|2}}
{{ref begin}}
*Robert W. Hamilton.'' The Law of Corporation '' 4th Edition, 1996 West Group
{{ref end}}

{{Law}}

[[Category:Administrative law]]
[[Category:Latin legal terminology]]

Ultra vires - Revision history

Ajay Kumar: Created a new article